Investment Q&A

Q: How would you recommend adding a small/prudent amount of exposure to bonds in the current market environment?

Q: Would XBB be suitable for a 2-year holding period at this point?

Q: I am looking at adding a 15 to 20 percent bond component to my portfolio. From the mix of laddered, aggregate, short/long term and high yield ETF’s listed. Which would you recommend and why? Please let me know if you have other possible suggestions? Thank you

Q: I'd like your assessment of MKB versus aggregate bond etfs like XBB, ZAG, and VAB. Has MKB performed better than the listed etfs? If it has performed better then is it because the etf has taken on additional risk to achieve the higher return? How might one incorporate MKB into the bond portion of their portfolio? Is it worth the higher fees?

Q: Please explain why the yields on these etfs differ so much

Q: What are your favourite Canadian bond ETFs given the current circumstances and looking ahead a couple of years.
Thank you!

Q: I'm looking at my legacy pile of preferred shares of which I have never been fond and wondering if this isn't a good time to sell and invest in a bond ETF such as XHY. I know you have expressed ambivalence about prefs but have also said in better times the class can do better. However, yields are roughly comparable, I can use the loses and invest the proceeds in XHY or a different bond fund which you might suggest, keeping the investment on the fixed income side of the page, Many thanks. al

Q: Hello,
Many experts are predicting a downturn in the market for at least the first half of 2023 and possible even longer. With that in mind, and if the Feds and Bank of Canada pause in Q1,... the market will stabilize and GIC rates may pull back. In fact RBC GIC's short term rates are about the same as longer term. Therefore, is this a good time to start buying Bonds ETFs with the hope that as rates start coming down the stock price will start moving higher? Am I correct in this assumption? And, which ones would you suggest? short, mid, or long term.? As well, what are you thoughts on Prime Linked Cashable GIC's ( offered by RBC)? Finally, would you buy a 1 year GIC currently at 4.65% ( by RBC) ?
Thanks
CR

Q: I completed the Portfolio Analytics Tool and uploaded my own holdings. It suggested I should invest in 30 percent fixed income - I’ve spent my investment years in the equity market - any suggestions for this asset class such as which bonds, what terms, etc… ?

Q: Good morning. When Brookfield announced they would create Brookfield Corp, I doubled my BAM.A holdings to get a larger base in the new entity. Looking at the market activity after the fact would you sell the added BAM.A and buy the new entity for an even larger position or allocate the funds elsewhere?
Sorry just thought of this I've modeled a dividend portfolio for my son to enhance his retirement. I've included XBB for a bond position. My question am I being to cautious? Would you ignore them entirely or do a 70/ 30 conventional split? Any other bond funds you would consider? Merry Christmas
David

Q: For price appreciation in the next 12-24 months, would you prefer a long-term ETF like XLB/TLT or an ETF with shorter duration like XBB/ZAG. Or a bit of both?
Thanks.

Q: In tuesday's globe and mail, Tom Czitron recommeded buying mid term (5-10 year) federal, provincial government, and corporate bonds because they seem to be in the sweet spot between lower risk and higher opportunity, especially if inflation declines and economic growth wanes.
1. Do you agree?
2. Can you recommend names of bonds that fit this bill?
3. please indicate order of buying (best to worse), if any.
thanks

Q: Great October Market Report. I notice that in the 2008 and 2020 periods, job opening numbers began to decline only after higher rates had plateaued for a period of time. Today, job opening numbers have started to decline before higher rates have begun to plateau. Does this suggest the FED has gone too far to fast...and is poised, or could be forced, to quickly pivot? I'm just looking for a good reason to step into ZAG, or XBB for some decent yields and opportunities for capital growth. Thanks as always.

Q: In the present interest rate environment and going forward 6- 12 months, which ETF is preferable i.e. XHY, PFIA, MFT, ZHY, XSB,XBB OR PYF? Would you choose 1 or a combination?

Thanks for your service!

Q: Dear 5i
My mother-in-law has a substantial amount of GIC money coming due and was wondering what to do with it re reinvesting . At 93 she is very conservative with her money with all investments being in GICs , Bonds and some mutual funds . She relies on her bank for investing information and investing which concerns me a bit .
She mentioned wanting to get more investment earnings from dividends as opposed to interest income because of the more favourable tax treatment . I did mention to her that she could achieve that with large cap dividend paying stocks or possibly ETFs but at a little greater risk .
I think she would be better off with an ETF rather than a mutual fund but was not sure which ETF might suite her the best . Should she invest in municipal , gov`t bonds or a Bond ETF ? With interest rates not yet peaking i`m concerned that buying bonds now may not be the best time as bond prices go down with rising interest rates as you know . GIC rates are higher now so i`m thinking that may be the way to go for her .
I realize you can`t personalize your answer but a general guideline would be much appreciated . She does not have high income needs as her CPP and OAS covers most of her monthly expenses except maybe for $300-$350 .
Thanks
Bill C

Q: What specific ETFs suggestions would make a diversified portfolio

Q: I've got a 10&% loss in XSH. Is there an alternative ETF I can buy after selling this?

Q: Hi 5i,

Looking for your top 2 or 3 fixed income recommendations for the market we're in, and where you feel we may be headed in the next 12-24 months. Looking for some bond ETFs, preferably Canadian listed.

Criteria is primarily capital preservation with some return to blunt the impact of inflation, and of course liquidity. I want to hold dry powder for buying opportunities I believe will come with recession, but I hate the idea of sitting in cash.

Thanks!

Q: Hi 5i team,

If you were to do a bond ETF portfolio to complement equity and other holdings, what (Cdn-listed) ETFs would you choose for balanced exposure to a range of market environments? Long-term registered account. I am thinking:

XBB--Canadian universe
VGAB--Global universe
XSTP--Short term US inflation-linked government

Thanks.

Q: Hi Ryan,
Several years ago I engaged with 5i for a portfolio analysis. I'm a recently retired investor. 5i strongly encouraged me to include a fixed income component to stabilize portfolio fluctuations and lower volatility.

With that advice and for tax purposes I purchased XBB, CLF, and PMIF into my RRSP. Now that the interest rates are marching steadily upwards I'm in a significant capital loss situation on my portfolio's bond allocation.

At this point do you suggest I just hold through the cycle and absorb the loss or should I sell and reallocate funds? Perhaps into some solid Canadian dividend payers? (eg. GWO?)

As always, much appreciate your advice and guidance in these unprecedented times. Thank-you.